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4 Air Pollutants Considered  Working Group Recommendation  Focus on NOx, CO 2 and PM-10  NOx is most actively traded emission species in CA, <6% from power plants, direct gas  CO 2 is not regulated in US (yet), int’l trade emerging, about 30% from power plants, gas  PM-10 increase due to CT generation, <1% from power plants, PM-2.5 may be an issue  SO 2, CO, HCs not likely to be significant Methodology

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9 Why Include CO2 for Efficiency? Likely development of CO2 emissions limits on stationary sources over the timeframe of efficiency measures (as long as 20 years) Assuming a zero value for 20 years implies a 100% probability of not having any CO2 limit This would be an extreme assumption This could lead to financial risk of having to offset more CO2 emissions in the future Precedent in existing efficiency avoided costs Resulting value for CO2 is a low estimate of CO2 Value Report cites ranges from $5 to $69/ton-CO2 Analysis uses $8/ton-CO2